Rethinking Export Controls as a Tool in Modern Technology Competition

Center for Strategic and International Studies | Sujai Shivakumar, Thomas Howell, Charles Wessner

The Center for Strategic and International Studies published a major report on September 21, 2026, addressing the application of export controls within modern international technology competition. Authored by Sujai Shivakumar, Thomas Howell, and Charles Wessner, the study investigates how unilateral and multilateral trade restrictions impact critical technologies and economic security.

Strategic technology competition requires modernised regulatory frameworks. The release, made available as a 2902kb document download, sits alongside broader research initiatives across CSIS programs covering artificial intelligence, critical minerals, missile defense, and economic security. Key organizational elements, including the Wadhwani AI Center and the Japan Chair, complement this work with targeted analyses on drone warfare developments, maritime posture, and bilateral security challenges. The report evaluates policy options for balancing national security imperatives with global commercial integration. Navigating these regulatory tradeoffs remains essential for future industrial policy.

Comment

Unilateral export restrictions implemented through the Bureau of Industry and Security create immediate friction between short-term technological denial and long-term supply chain resilience. When sovereign jurisdiction extends extraterritorially via the Foreign Direct Product Rule, allied technology sectors face severe compliance overheads and market alienation. This tension forces partner states to develop alternative, non-controlled manufacturing pipelines.

Such regulatory fragmentation accelerates the design-out of controlled components in third-country commercial architecture. Foreign semiconductor foundries and equipment vendors increasingly prioritise indigenous, export-control-free tooling cycles to bypass Commerce Control List restrictions. Consequently, the long-term visibility of the Bureau of Industry and Security into global dual-use technology flows diminishes significantly.

Strategic Question for Discussion

Which factor poses a greater threat to long-term technology denial regimes — foreign design-out of components governed by the Foreign Direct Product Rule, or the enforcement limits of the Bureau of Industry and Security?

The available evidence points toward foreign design-out of regulated components as the more structural threat to technology denial regimes. While the Bureau of Industry and Security can intensify enforcement actions, systematic avoidance of items subject to the Foreign Direct Product Rule permanently shifts global supply chains away from regulated architectures. This trajectory eventually deprives regulatory authorities of leverage over emerging commercial tech ecosystems.

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